Global macro analysis for 20/04/2016:
The German ZEW data published yesterday was a big surprise for market participants. The main benchmark for the economic sentiment improved to the level of 11.2 from 4.3 a month ago, which was even better than the expected number of 8.2 points. This was a big improvement from the lowest level since October 2014 that was registered in February. Meanwhile, the index of eurozone economic sentiment unexpectedly soared to 21.5 in April from 10.6 a month earlier, settling well above forecasts for a reading of 13.9. In conclusion, these readings might suggest that the German economy is performing very well and investors are looking positively into the future.
Let's now take a look at the EUR/USD technical picture in the 4H time frame. The bearish flag pattern might be forming in this time frame as indicated by the dashed blue lines. To confirm this pattern, bears must break out below the lower flag line and head lower towards the recent support at the level of 1.1232. Successful violation of this level would mean that they are in full control over this market. Any new high above the level of 1.1465 will invalidate this view.
